Citizens Bus. Bank v. Mission Bank
Citizens Bus. Bank v. Mission Bank
2024 WL 1120151 (C.D. Cal. 2024)
February 8, 2024

Pym, Sheri,  United States Magistrate Judge

Failure to Produce
Third Party Subpoena
Protective Order
Download PDF
To Cite List
Summary
The court granted plaintiff's motion to compel third party Dakhil to produce documents in compliance with a subpoena duces tecum. The court found that Dakhil had waived objections to the subpoena by failing to respond within 14 days and ordered them to produce all responsive documents by a specified date. The court also denied plaintiff's request for an order to show cause and reimbursement of attorney fees and costs, but warned Dakhil of potential sanctions if they fail to comply with the court's order.
Additional Decisions
Citizens Business Bank
v.
Mission Bank, et al
Case No. 5:22-cv-01473-FLA (SPx)
United States District Court, C.D. California
Filed February 08, 2024

Counsel

Zachary Thomas Timm, Christina N. Goodrich, Katherine Ramos, Ryan Q. Keech, K and L Gates LLP, Los Angeles, CA, Ketajh M. Brown, Pro Hac Vice, K and L Gates LLP, Chicago, IL, for Citizens Business Bank.
Stephen Gerard Larson, Catherine Sima Owens, Jonathan E. Phillips, Tyler J. Franklin, Larson LLP, Los Angeles, CA, Jerry A. Behnke, Larson LLP, Costa Mesa, CA, Troy Stefan Tessem, Foley and Lardner LLP, Los Angeles, CA, for Mission Bank, et al.
Pym, Sheri, United States Magistrate Judge

Proceedings: (In Chambers) Order Granting in Large Part Plaintiff's Motion to Compel Third-Party to Comply with Subpoena [51]

I. INTRODUCTION
*1 On January 9, 2024, plaintiff Citizens Business Bank filed a corrected motion to compel third party Dakhil Commercial Properties, L.P. (“Dakhil”) to produce documents in compliance with plaintiff's Rule 45 subpoena duces tecum, and for the court to issue an order to show cause why a contempt citation should not issue and why Dakhil should not be required to reimburse plaintiff's attorney fees and costs incurred in drafting the motion. Docket no. 51. Plaintiff's motion is supported by the declaration of Ketajh Brown (“Brown Decl.”) and exhibits. Docket no. 51-1. Dakhil did not oppose the motion to compel. Plaintiff filed a supplemental memorandum on January 16, 2024. Docket no. 64.
The court found a hearing on the motion would not be of assistance, and so vacated the hearing scheduled for February 13, 2024. The court now grants plaintiff's motion to compel compliance with the subpoena but denies plaintiff's request for an order to show cause, for the reasons that follow.
II. BACKGROUND
On August 19, 2022, plaintiff filed a complaint against defendant alleging misappropriation of trade secrets, intentional interference with contractual relations, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, and unfair competition following plaintiff's acquisition of Suncrest Bank in January 2022.
On August 11, 2023, plaintiff served a subpoena pursuant to Rule 45 of the Federal Rules of Civil Procedure on Dakhil. Brown Decl. ¶ 4, Ex. 1. The subpoena commanded Dakhil, by September 1, 2023, to produce documents responsive to 20 discovery requests, which may be divided into three categories: (1) documents and communications between Dakhil and defendant; (2) documents and communications between Dakhil and 11 specified former employees of plaintiff; and (3) communications between Dakhil and any parties related to any account or business that Dakhil contemplated opening with plaintiff but ultimately opened with defendant. Id., Ex. 1. Dakhil did not produce any documents, respond to the subpoena, or move to quash or for a protective order. Id. ¶ 5.
On November 27, 2023, pursuant to Local Rule 37-1, plaintiff sent a letter to Dakhil requesting that it comply with the subpoena by contacting plaintiff to discuss the document production or producing the documents as instructed by December 1, 2023. Id. ¶ 6, Ex. 2. On November 29, 2023, Dakhil telephoned plaintiff to discuss the timing of its production. Id. ¶ 7. On December 12, 2023, after having not received any documents from or any further communications with Dakhil, plaintiff emailed Dakhil to follow up on the phone conversation, offered assistance, and asked for the document production by December 29, 2023. Id. ¶ 8, Ex. 3. Dakhil did not respond to the December 12, 2023 email or produce any documents. Id. ¶¶ 9-10.
III. DISCUSSION
A. Dakhil Must Produce All Documents Responsive to Plaintiff's Subpoena
Plaintiff seeks an order compelling Dakhil to produce all documents responsive to the Rule 45 subpoena served on it on August 11, 2023. Docket no. 51.
*2 Federal Rule of Civil Procedure Rule 45 permits a party to serve a subpoena commanding a nonparty to produce and permit inspection or copying of documents and electronically stored information. Fed. R. Civ. P. 45(a)(1)(D). Rule 45 subpoenas must meet the same requirements applicable to any discovery sought because “[t]he scope of discovery [sought] through a subpoena under Rule 45 is the same as the scope of discovery permitted under Rule 26(b).” Intermarine, LLC v. Spliethoff Bevrachtingskantoor, B.V., 123 F. Supp. 3d 1215, 1217 (N.D. Cal. 2015) (citation omitted); ATS Prods., Inc. v. Champion Fiberglass, Inc., 309 F.R.D. 527, 530 (N.D. Cal. 2015) (citing the Advisory Committee Notes to Rule 45). Rule 26(b) allows a party to obtain discovery of “any nonprivileged matter that is relevant to any party's claim or defense.” Fed. R. Civ. P. 26(b)(1).
The nonparty served with the subpoena must make any objections to it within 14 days after service, or before the time for compliance if less than 14 days. Fed. R. Civ. P. 45(d)(2)(B). “A nonparty's failure to timely make objections to a Rule 45 subpoena ... generally requires the court to find that any objections have been waived.” Moon v. SCP Pool Corp., 232 F.R.D. 633, 636 (C.D. Cal. 2005) (citations omitted). But “[i]n unusual circumstances and for good cause, ... the failure to act timely will not bar consideration of objections [to a Rule 45 subpoena].” McCoy v. Sw. Airlines Co., Inc., 211 F.R.D. 381, 385 (C.D. Cal. 2002). “[A] court determining the propriety of a [Rule 45] subpoena balances the relevance of the discovery sought, the requesting party's need, and the potential hardship to the party subject to the subpoena.” ATS Prods., Inc., 309 F.R.D. at 531 (citation omitted).
Objection to a subpoena does not relieve a nonparty of its obligation to comply with the subpoena. See Franco v. Alorica Inc., 2021 WL 6104816, at *3 (C.D. Cal. Nov. 5, 2021). Instead, the nonparty may move to quash or modify the subpoena before the requested date for production under Fed. R. Civ. P. 45(d)(3). See id. The objecting person may also seek a protective order under Rule 26(c), which requires a showing of “good cause ... to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense.” Fed. R. Civ. P. 26(c); U.S. v. King Cnty., Wash., 2022 WL 16835866, at *3 (W.D. Wash. Nov. 9, 2022); see also Micro Motion, Inc. v. Kane Steel Co., Inc., 894 F.2d 1318, 1322-23 (Fed. Cir. 1990) (outlining a nonparty's options in responding to a subpoena).
Here, Dakhil was served with the subpoena on August 11, 2023 and commanded to produce the responsive documents by September 1, 2023. Brown Decl. ¶ 4, Ex. 1. Dakhil did not produce responsive documents, file any written objections, move to quash the subpoenas, or move for a protective order. Id. ¶ 5. On November 29, 2023, after receiving plaintiff's November 27, 2023 letter requesting compliance with the subpoena by December 1, 2023, Dakhil contacted plaintiff about the document production. Id. ¶¶ 6-7. But Dakhil did not produce any documents following the call. Id. ¶ 8. Dakhil similarly failed to respond in any way to plaintiff's December 12, 2023 correspondence requesting production by December 29, 2023. Id. ¶¶ 9-10, Ex. 3. As such, the court finds Dakhil has waived any grounds for objections. See Richmark Corp. v. Timber Falling Consultants, 959 F.2d 1468, 1473 (9th Cir. 1992) (“It is well established that a failure to object to discovery requests within the time required constitutes a waiver of any objection.”).
*3 Moreover, Dakhil failed to oppose the instant motion to compel by the January 23, 2024 deadline (see L.R. 7-9), or at all, and as such may be deemed to have consented to the granting of the motion. See L.R. 7-12. Given that Dakhil has waived any objections to the subpoena and ignored plaintiff's requests for production without any excuse despite being given substantial time to comply, plaintiff's motion to compel is plainly justified. The court therefore grants plaintiff's motion to compel Dakhil to produce all documents in its possession, custody, or control responsive to the subpoena.
B. An Order to Show Cause Is Premature
Plaintiff also moves for an order to show cause, which would require Dakhil to show cause why a contempt citation should not be issued and why it should not be required to reimburse plaintiff for the attorney's fees and costs incurred in filing this motion to compel. Docket no. 51 at 2, 7-8.
“Rule 45 provides the only basis to sanction non-parties for failing to comply with a subpoena duces tecum.” Beverly v. Interior Elec. Inc. Nevada, 2023 WL 355692, at *1 (9th Cir. Jan. 23, 2023); Pennwalt Corp. v. Durand-Wayland, Inc., 708 F.2d 492, 494 (9th Cir. 1983). Rule 45 provides that a court may hold in contempt a person who fails without adequate excuse to obey a subpoena or order related to it, “but it does not independently provide for the award of attorneys' fees as a sanction.” Beverly, 2023 WL 355692 at *2 (citing Fed. R. Civ. P. 45(g)). As such, a court may not impose sanctions against a non-party under Rule 45 until after a contempt finding, notice, and an opportunity to be heard. Id.see also In re Plise, 506 B.R. 870, 879 (Bankr. 9th Cir. 2014) (before sanctions can be awarded, “the requesting party must first file a motion for contempt[ ] and the subpoenaed party must be found to be in contempt”).
Plaintiff's request for an order to show cause why a contempt citation should not be issued and attorney's fees awarded is premature at this time, given that the court is just now ordering compliance with the subpoena. Nevertheless, the court appreciates plaintiff's frustration given the apparent lack of any legitimate basis for Dakhil to have largely ignored the subpoena and to have failed to follow up on plaintiff's efforts to discuss the matter after their November 29 call. The court cautions Dakhil that if it fails to comply with the court's order, it may be found in contempt and subject to sanctions. Should Dakhil be found in contempt, plaintiff will be required to submit a declaration or other evidence establishing the amount of time plaintiff's counsel spent in drafting this motion and any other basis for the monetary sanctions requested.
IV. CONCLUSION
Accordingly, IT IS HEREBY ORDERED that plaintiff's motion to compel (docket no. 51) is granted to the extent set forth above. Dakhil is ordered to promptly produce all documents responsive to the subpoena, and by no later than February 16, 2024.